Telecoms operators and other corporate organizations who have been paying the five per cent national fiscal stabilization levy (NFSL) since 2013, are appealing to the new government to get rid of it from their first budget because it has outlived its purpose and it is hurting their businesses.
This comes on the heels of a promise by new Finance Minister Ken Ofori-Atta to get rid of all the country’s “nuisance taxes”.
President John Dramani Mahama’s government introduced the NFSL on July 15, 2013 to help reduce Ghana’s growing deficit. It was pegged at five per cent of the accounting profits of specified companies and institutions.
The categories of companies selected to pay this special tax include, telecoms service providers, banks, (excluding rural and community banks) non-banking financial institutions, insurance companies, breweries, inspection and valuation companies, companies providing mining support services, as well as shipping lines, maritime and airport terminals.
It was to last for 18 months, ending January, 2015, but this is February 2017 and the tax is still in force.
Meanwhile, the previous government, which introduced it, is said to had promised it was going to remove it from this year’s budget, but it lost the elections so the onus is on the new government to get rid of it.
“We expect the new Finance Minister, Ken Ofori-Atta to announce in this year’s budget that the NFSL is finally out,” one telecoms CEO said.
Meanwhile, months ago, the CEO of MTN Ghana, Ebenezer Twum Asante had said at the time the NFSL was introduced, the selected organizations were happy to pay because it was to help stabilize the economy.
He noted that on two previous occasions, the issue of waving it was mentioned in the former president’s state of the nation address but no action was taken and so the affected companies continue to pay.
“But we continue to do so at the expense of our own reinvestments and payment of dividends to our shareholders so we believe it is time for government to start a discussion on how to wave it,” he said.
Mr. Asante said the NFSL has overrun the period set for it to last for, and because the affected companies did not expect it to go beyond 18 months, it is now beginning to impact plans for expansion and more reinvestments.
He said “we were expecting the government to wave it latest by this year so that we can go back to our mandatory taxes, duties and levies which we are very happy to continue paying.”
The MTN boss said telecoms companies and other corporate institutions will continue to engage government on this matter and other related matters to ensure what is best for the country.
By Samuel Dowuona